Capita Insurance Services & Intelligent Insurer MGA report 2015

11 May 2015

Recently I sat down with Intelligent Insurer to discuss their 2015 MGA Market review, which provided interesting insights into the state of the MGA market.

Diversification and the formation of new partnerships are beginning to play an ever more important role in changing the industry model, and managing general agents (MGAs) represent an increasingly promising avenue for profit

While larger and more traditional lines such as aviation, marine and property begin to feel the pinch, MGAs writing niche business are not being subjected to the same pressure. The result is that more insurers are looking to utilise their capital effectively by providing more capacity to MGAs.

Those that don’t provide binders to MGAs are potentially missing out on future profits if they maintain their reliance on mainstream business, whilst low loss ratios and the specialist nature of MGAs offer the potential to provide profits and an opportunity to diversify.

Similarly reinsurers are looking to move capital into the MGA market as rates continue to suffer. The low level of competition within niche classes allows business to be priced according to risk rather than market forces.

It is therefore no surprise that talented underwriters with a good niche, within large insurers or Lloyd’s, may be thinking about moving towards the MGA market.

Capita has been hugely successful in providing equity and outsourcing resources to start-ups in the MGA market while also helping to reduce the costs faced by existing MGAs. As the report highlights, MGAs are now of significant scale and size to play a leading role in the insurance market. It is Capita’s goal and commitment to help MGAs flourish in this rapidly growing and increasingly important market.

Read the full report here

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